Waiver of Appeal Rights: Stipulation Reviewed on its Face and Narrowly Construed

During our Constitution Week Series, we looked at the right to appeal guaranteed by Article 5, Section 9 of the Pennsylvania Constitution and contrasted that constitutional guarantee with the lack of same under the federal Constitution. In an earlier post, we also examined the development in Pennsylvania of administrative agency appeals and noted that the present familiar rubric is a relevantly modern development. Recently, in Gravel Hill Ent., Inc. v. Lower Mt. Bethel Twp Zoning Hearing Bd., ___ A.3d ___ (Pa. Cmwlth. 2017), No. 2619 C.D. 2015, filed October 30, 2017, Commonwealth Court sitting en banc addressed, among other issues, an alleged waiver of appeal rights through a stipulation at the trial court level. The court found that the right to appeal was not waived under the circumstances of that case, and the discussion of the issue is instructive. Judge McCullough wrote the opinion for a unanimous (on that issue) court.

Gravel Hill purchased property in Lower Mount Bethel Township at a federal marshal’s sale. The property previously was used to accumulate stumps and other debris (waste) which the previous owner purported to process to resell, and was the subject of an Order by Pa DEP requiring the previous owner to stop accumulating the waste and to remove it at a specified volume per week. Gravel Hill applied to the Township Zoning Hearing Board (ZHB) for a variance allowing it to shred and grind the stumps to produce mulch and top soil. William Buehler, Catherine S. Buehler, Gus Tishuk, and Arlene Tishuk (Intervenors), among others, appeared at the ZHB proceedings and opposed Gravel Hill’s variance application. The ZHB denied the variance application and Gravel Hill appealed to the Northampton County Court of Common Pleas. The Township filed a notice of intervention. Following argument, the parties consented to a delay in the trial court proceeding to allow settlement discussions, and the court held two settlement conferences. Intervenors attended two Township Supervisors meetings where they were advised of the appeal of the ZHB decision and the ongoing settlement discussions. The Intervenors alleged that the meetings alerted them that the Township could change its position as to Gravel hill’s application and agree to conditions that they found unacceptable. Intervenors then sought to intervene with the trial court and Gravel Hill opposed. At a hearing on Intervenors’ petition, Gravel Hill’s counsel advised that it had a draft settlement agreement with the Township pending approval at a public meeting. After a conference between the parties and Intervenors’ counsel, the parties advised the court that they had reached a stipulation regarding Intervenors’ petition, which was put on the record as follows:

[Gravel Hill counsel]: Your honor, we’ve reached an agreement, I believe. And this is what we submit to the Court. Gravel Hill withdraws its objection to the petition for intervention. Gravel Hill shall provide the intervenors forthwith with a copy of the proposed — the draft settlement agreement and will provide or share a copy with the Court if the Court wishes. The parties agree that as a matter of law, the Court would be empowered to approve or reject any settlement agreement notwithstanding any positions taken by the intervenors. And the intervenors will be given an opportunity to provide comment on the settlement agreement.

* * *

THE COURT: What do you mean, the Court can approve or reject the settlement notwithstanding objections from the intervenors?

Gravel Hill counsel]: Means that the intervenors do not have veto power over the settlement agreement.

THE COURT: Really?

[Intervenors’ Counsel]: Yes.

[Gravel Hill’s counsel]: They’re empowered to provide the Court with whatever comment they wish with regard to the agreement itself. That is our understanding.

* * *

THE COURT: [Intervenors’ counsel], you heard everything that [Gravel Hill’s counsel] has placed on the record. So just for my own understanding, the objection to the petition to intervene is withdrawn. So I’m going to grant the petition to intervene. That is the number one first thing.

THE COURT: If the township votes on Monday to approve the settlement, even if your clients oppose it, I can approve or reject the settlement and bind your clients; is that correct?

[Intervenors’ counsel]: Yes, Your Honor. It’s our understanding we will be able to both participate in the public hearing process before the township but also to make our views known to the Court. Under the stipulation, the Court has the authority to either accept or reject the agreement. But I think at the bottom, we would need to sway the Court that the agreement should not be approved for whatever reasons we would articulate. Ultimately, the Court would have the authority to enter the agreement after considering all the views of all the parties.

Slip op. at 4-6. The court granted the petition to intervene and directed the parties to file briefs on the underlying appeal.

The Township held a public meeting to discuss the proposed settlement and Intervenors provided comments, after which the Township voted 3-2 to approve the agreement. Intervenors filed comments with the trial court which resulted in changes to the approved agreement. The amended agreement was approved at the Township’s next public meeting. Following that meeting, Gravel Hill and the Township moved the trial court to approve the settlement agreement which Intervenors opposed. The trial court approved the agreement and adopted it as an order, and Intervenors appealed.

Before Commonwealth Court, Intervenors argued that the trial court abused its discretion when it approved the agreement. Among other arguments, the Township asserted that Intervenors waived their right to appeal by entering into the stipulation.

Article 5, Section 9 of the Pennsylvania Constitution provides that:

There shall be a right of appeal in all cases to a court of record from a court not of record; and there also shall be a right of appeal from a court of record or from an administrative agency to a court of record or to an appellate court, the selection of such court to be as provided by law; and there shall be such other rights of appeal as may be provided by law.

Recognizing that the right to appeal is guaranteed by the constitution, Commonwealth Court began its analysis by looking at the specific terms of the parties’ stipulation. The court relied on its earlier decision in East Norriton Township v. Gill Quarries, Inc., 604 A.2d 763 (Pa. Cmwlth. 1992), which provides guidance on construing stipulations. The Gill court laid out the following rubric:

The Pennsylvania rule on stipulations is long-settled: parties may bind themselves, even by a statement made in court, on matters relating to individual rights and obligations, so long as their stipulations do not affect the court’s jurisdiction or due order of business….

The courts employ a contracts-law analysis to interpret stipulations, so that the intent of the parties is controlling…. The language of a stipulation, like that of a contract, is construed against the drafter…. The court will hold a party bound to his stipulation: concessions made in stipulations are judicial admissions, and accordingly may not later in the proceeding be contradicted by the party who made them….

Id. at 88-89, 496 A.2d at 21 (citations omitted and footnote added).

Because contracts-law analysis is employed to interpret stipulations, we must interpret the instant stipulation in accordance with the following rules:

A court cannot disregard a provision in a [stipulation] if a reasonable meaning can be ascertained therefrom. In construing a [stipulation,] each and every part of it must be taken into consideration and given effect, if possible, and the intention of the parties must be ascertained from the entire instrument.

The parties predictably had opposing views of the stipulation’s import. Intervenors pointed out that the stipulation “did not mention, refer to, discuss, or expressly or impliedly implicate the right of appeal” and, therefore, Intervenors’ right to appeal was not waived. They also argued that the Pennsylvania Constitution confers the right to appeal and asserted that waiver of that right cannot be presumed where the record is silent. Intervenors asserted that the courts will indulge every reasonable presumption against waiver of a fundamental right. The Township argued that Intervenors, having entered into the stipulation, relinquished their right to veto the settlement agreement, agreed to authorize the trial court to accept or reject the settlement agreement, and agreed to be bound by the trial court’s decision.

The court looked to Cobbs, supra, for further guidance. In Cobbs, several defendants executed a stipulation with the plaintiff at the trial court level, agreeing that “if the liability phase of the case would have proceeded, it would have been determined that the asbestos-containing products, manufactured by [the defendants], were all a substantial factor and cause of decedent’s injuries, disease, damages, and death.” 661 A.2d at 1377. On appeal, the appellee-plaintiff argued that the stipulation constituted a waiver of rights to post-trial relief. Superior Court rejected that argument and concluded that the stipulation only affected the issue of causation, reasoning that:

After reviewing the stipulation, we conclude, from its clear and unambiguous language, that it was limited to the narrow issue of legal causation. At no point were Owens or any other defendants’ rights to post-trial relief discussed, mentioned or otherwise implicated. Examining the stipulation on its face, and narrowly construing its terms, we can only conclude that Owens’ rights to post-trial relief were unaffected by the stipulation and remained intact.

Id. at 1378 (internal footnotes omitted).

The court then turned to the language of the parties’ stipulation and found that any discussion regarding the parties’ appeal rights was “notably absent.” The court characterized Intervenors’ agreement to provide that the trial court was authorized to decide the matter and its decision was binding on the parties, essentially stating the law. However, the court also concluded that Intervenors did not agree to forfeit their rights to appeal that decision. The court found Cobbs persuasive and held that it would not read a waiver into the stipulation in the absence of any discussion of appeal rights on its face: “The court will not extend the language by implication or enlarge the meaning of terms beyond what is expressed.” Slip op. at 11 (citing Cobbs, 661 A.2d at 1377).

We can take away from Gravel Hill that courts will not find a waiver of appeal rights where a stipulation is silent on that issue. However, as Gill instructs, notwithstanding that the right to appeal in Pennsylvania is guaranteed by the constitution, courts cannot disregard a stipulation provision if a reasonable meaning can be ascertained even if that reasonable meaning is a waiver of the appeal right. Parties may contract away their rights, and careful attention must be paid lest an unintended waiver result.

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About the Author:

Dennis A. Whitaker, partner at Hawke, McKeon & Sniscak, LLP, is an experienced litigator with over 25 years of Commonwealth service. Focusing on government appellate and original jurisdiction practice in state and federal courts, Dennis offers sound advice, creative solutions, and effective strategies to clients navigating the appeals process.

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